Hi guys, during the course of babypips, I learned that fundamental analysis is also necessary for forex trading, I understand those things as I’m also a student of Commerce.
But when I searched about different economies of world and different news, I’m not able to understand how and what does they affect that particular currency.
I searched the wall street journal and a bunch of sites, but all those websites, only tell us the news, we have to figure out that which currency they affects and in which way
(Positive & Negative).
It may mot be hard for experienced traders who’re trading for a lot of years, but for me I’m getting very confused on every news, then I search on Google that on which way it affects that currency.
So I’m asking for any youtube channel, any site which explains us that how will the news affects that currency, in which way and why.
Or I have to do it on my own with only time and experience and patience.
It’s not easy for retail traders to obtain the key economic information that big banks use when enabling a position using a 200SMA for long term trend. As such, you could aim to follow western governments reaction to Ukraine war and managing world wide inflation - interest rate movements.
I use Bangkok Bank.daily foreign currency movements (TT buying rates) as a guide to whether major currencies are weak or strong as against the Thai baht during the day. You could do similar for major currencies in the country you live.
Also you could use the market milk ‘majors’ heat map on this site.
Yes brother, you are true because not all real information is disclosed to us. We don’t have even sufficient idea about economy. An expert economist can do this job perfectly.
Hi for starters i used to start from interest rate and inflation. As Central banks raise rates (hike) it usually good for the currency and can set the tone for a long-trend and vice versa when Central banks cut rates (dovish) which can be bad for the currency. Also the central banks usually tells what they are about to do in the future through their statement or meeting minutes (can be found in each of the central banks website)
and which leads to the second fundamental that is inflation. when inflation are high (above 2% for most case) Central bank will tend to raise interest rate, while falling inflation could lead traders to expect central banks to cut rates. that’s why inflation and interest rate are always tier 1 economic data. you could also start from there.
for YouTube i could recommend watching Karen foo, she has a crash course on fundamentals.
why do you think so many financial institutions, who employ plenty of expert economists, are generally making such poor annualised returns on their capital funds?
you could avoid this problem by trading higher timeframes and crosses. they are “immune” to news/fundamentals till a certain point. i only watch high impact fundamentals and i “trade” em in which i avoid those relevant pairs. for example if today there is a report about UK’s inflation i won’t trade any GBP-pair.
i think fundamentals/news a for big bois and i also belive in that the fundamental data is always priced in yet. i mean when a report is about to be released, they first will write an article about it then re-read the article and maybe change a few sentence or grammatical error and after a half day they release the figure/data/report so the train is already departed or even on his way back when we get informed about that fundamental…
That’s good strategy, currently I’m also doing same, whenever there is a big news on any pair, I saty away from market and come back after 1 or 2 days later, it usually lowers thr trading days. But eventually we have to understand these fundamentals, if we want to succeed in trading.
I agree that it’s difficult for some of us to understand how news affects a particular currency. Along with some of the other suggestions here, is forexfactory.com While I’m still getting better at using it, you could try it.
Basically there’s a ‘flag’ system. If you click on the calendar tab on the top. Red flag, high impact news so don’t trade pairs on that day, affected by that currencies news (until you know how to), amber and yellow trade with your normal risk management.
You can also ‘open’ the flag to get an explanation of the news and the affect on the currency.
Fundamental analysis is all about picking news that’s CRYSTAL clear and shows the strength or weakness of a currency without any doubt. Once you’ve found those signals, the next move is to pair up a strong currency with a weak one, which creates a forex currency pair.
After establishing the currency pair, the trader can then form a preconceived directional bias or view based on their analysis of the market. This bias may be bullish, indicating an expectation that the currency pair will increase in value, or bearish, indicating an expectation that the currency pair will decrease in value.
When big news or economic data hits, it can cause a sudden price movement, which can make traders adjust their positions. This can lead to a technical pullback, which is just a fancy way of saying the price is correcting itself, even if the overall trend is still going in the same direction.
Thanks to ChatGPT, it’s super easy to analyze news articles these days. All you need to do is copy and paste the article you want to look at, and ChatGPT will summarize it for you. No more wasting hours reading long articles when you can get the gist of it in just a few seconds!
It’s really tough to guess the exact economic condition because every single time an economic event takes place in any part of the world, affecting the entire economy. What expert economists can do is they can predict the average market condition.
